Tax on joint accounts

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Snehashish Ghosh (Querist)
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22 October 2017 I am in the 20% tax bracket. I have some fixed deposits in my name only and I pay tax on the interest income from these deposits. I am unmarried and 50 years old.
My sister who is married has income from tuitions and trading in shares. She also has some fixed deposits in the same bank as me but in her name only. She is in the Nil or at the most 10% tax bracket. She pays tax on her income separately using her PAN.
I now want to convert most of my Fixed Deposits and Savings accounts to JOINT ACCOUNTS with my sister. I will be the Primary or First Account Holder and my sister will be the Second Joint Account Holder.
My question is:
1. Will there be any change in the way I and my sister have been paying taxes if I convert my deposits to Joint Accounts with me as the First Account Holder?
That is will there be some clubbing of income?
Or will I continue to pay tax on the income from my deposits alone as first account holder and my sister will continue to pay tax on her tuition, trading and income from deposits in her name only as we have been doing in previous years so far in the same way with no change?
2. Is it correct that the banks will deduct tax (TDS) ONLY in the name of the First or Primary Account Holder on the interest income from Joint Accounts?
Please note that I am bothered about the taxation angle only and not about any disadvantages of choosing joint accounts other than taxation.

Seeking an urgent response.

K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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23 October 2017 Will there be any change in the way I and my sister have been paying taxes if I convert my deposits to Joint Accounts with me as the First Account Holder? That is will there be some clubbing of income?
Clubbing of Income will not apply since you will be the first holder.

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K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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23 October 2017 Or will I continue to pay tax on the income from my deposits alone as first account holder and my sister will continue to pay tax on her tuition, trading and income from deposits in her name only as we have been doing in previous years so far in the same way with no change?

You are correct.

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K Srinivas, CMA CS

K Srinivas, CMA CS (Expert)
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23 October 2017 2. Is it correct that the banks will deduct tax (TDS) ONLY in the name of the First or Primary Account Holder on the interest income from Joint Accounts?

Due to operational easiness, The Banks usually deduct tax in the name of first holder only in case of Joint accounts.

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